Aliev Sees Armenian Concessions After Azeri Military Buildup

President Ilham Aliev has promised further substantial increases in Azerbaijan’s military spending, saying that they will eventually force Armenia to make more concessions on Nagorno-Karabakh.

Russian news agencies quoted him on Tuesday as touting a 75 percent jump in his government’s defense budget this year as a major step towards achieving a solution to the Karabakh conflict favorable to Azerbaijan.

“Current measures to strengthen the country's military potential and increase the military budget will force Armenia to make concessions when negotiating the Karabakh settlement and to ultimately leave occupied Azerbaijani land,” Aliev was reported to tell the personnel of Azerbaijan’s State Border Guard Service.

Baku announced in June that it will use its growing oil revenues to increase its military budget from the 2004 level of $175 million to $300 million this year. Aliev clamed at the time that the Azerbaijani military, which suffered a humiliating defeat in the 1991-1994 Karabakh war, has already gained the upper hand over its Armenian adversary.

The Azerbaijani leader said on Tuesday that this trend will continue and that his army will buy more weapons and military hardware. The objective, he said, is to make Azerbaijan’s military spending equal to Armenia’s entire state budget which is projected to be worth roughly $870 million in 2005. But he did not specify when it will be achieved.

Aliev’s repeated threats to use oil money for winning back Karabakh were shrugged off by Defense Minister Serzh Sarkisian last month. “We are not scared of those 300 million [dollars],” he said.

Armenia’s official defense budget is projected to grow by 27 percent to 60 billion drams ($132 million) this year. The Armenian military and its allied forces in Karabakh are also thought to have other, unpublicized sources of funding and supplies.

Still, Aliev insisted that Azerbaijan is far more advanced in economic and political terms than its arch-foe. "Within a few years, the gap between us will become even wider," he said.

It was not clear what Aliev thinks constitutes that gap. After nearly a decade of oil exports, Azerbaijan remains a low-income country in terms of its GDP per capita which is still comparable to that of Armenia. The oil-rich nation ranked 91st in the UN’s 2004 Human Development Index of 151 countries of the world. Armenia was in 82nd place in the rankings.

Aliev’s remarks came ahead of his crucial talks with President Robert Kocharian which international mediators believe could clear the final hurdle to the peaceful settlement of the long-running dispute. The two men are scheduled to meet on August 26 in the Russian city of Kazan on the sidelines of a summit of ex-Soviet states. The summit will be preceded by a meeting in Moscow of the Armenian and Azerbaijani foreign ministers.

“A lot has been achieved over the last one and a half years and the meeting in Kazan will be a very important event,” Steven Mann, the U.S. co-chair of the OSCE’s Minsk Group on Karabakh, said in an interview with the Baku daily “Zerkalo” published on Wednesday.

But Mann cautioned that the peace process remains “very difficult.” “It is too early to say that a document [ending the conflict] is ready,” he said. “It would be wrong to say that we are going to sing a document right now.”

According to Armenian officials, the conflicting parties have been discussing a peace deal that would lead to a referendum on independence in Karabakh and the liberation of Armenian-controlled Azerbaijani lands that surround the disputed enclave. Mann and other international mediators have not denied or confirmed those claims.

In a related development, the Azerbaijani military confirmed on Wednesday reports that one of its soldiers was killed and another one wounded in a landmine explosion near the Armenian-Azerbaijani line of contact northeast of Karabakh. The incident was reported one day after the disappearance of another Azerbaijani serviceman. Azerbaijani media quoted officials in Baku as saying that the 23-year-old warrant officer was captured by Armenian forces.